African Bank, known as , is under pressure as low-income South Africans struggle to pay off high-interest loans.
It said in a trading statement on Monday it expected further declines in second-half profit, following a 26% earnings drop in the first half.
It also said it planned to dispose of its Ellerines business, where it sells furniture on credit, saying the unit no longer fit into its strategy.
Loans in the April-June quarter grew by 19% to R60.3bn year-on-year, slower than the 25% growth achieved in the previous period, while non-performing loans rose to 30.2% from 29.2%.
, which does not take any deposits, said it would raise up to R4bn through a rights issue to shore up its balance sheet.
The rights offering will be fully underwritten by Goldman Sachs, it said.
Shares of tumbled at the start of trade on Monday, falling about 10%.